RRHS affiliation continuing with Duke LifePoint

Oct. 30, 2013 @ 05:18 AM

Rutherford Regional Health System (RRHS) CEO Cindy Buck said affiliation talks with Duke LifePoint are moving forward as planned.

In September, the RRHS Board of Trustees voted to sign a memorandum of understanding to explore a joint venture with Duke LifePoint Healthcare, based in Brentwood, Tenn.

"Currently, the organizations are participating in what is called the due diligence phase in which intermediaries between the two organizations are sharing information in order to construct a final definitive agreement that will join our organizations together," Buck said.

Duke LifePoint operates four hospitals including Maria Parham Medical Center in Henderson, Person Memorial Hospital in Roxboro, Twin County Regional Healthcare in Galax, Va. and Marquette General Health System in Marquette, Mich. Duke LifePoint has recently signed a memorandum of understanding with Wilson Medical Center in Wilson.

Duke LifePoint is a joint venture between LifePoint Hospitals and Duke University Health System. According to its website, the group's goal is to "build a system of hospitals in the North Carolina region where Duke already has a strong presence and LifePoint has several affiliated hospitals nearby."

Once the final arrangement is approved by the RRHS Board of Trustees and Duke LifePoint, it will be sent to the North Carolina Attorney General's office for approval. Buck said the approval process with the Attorney General could take "as long as 60 days, which is standard procedure for an affiliation such as this."

The proposed venture allows joint ownership of RRHS with Duke LifePoint and governance will be shared between the two entities. It means the make up of the Board of Trustees will be 50 percent appointed by RRHS and 50 percent appointed by Duke LifePoint.

Employees of RRHS will be considered employees of the joint venture.

Additionally, the assets retained by RRHS and the proceeds from the transaction will eliminate the debt held by the hospital. Any remaining assets will be used for funding "charitable and community needs."

Buck said she has been meeting with RRHS staff over the last few weeks in a town hall setting to address any questions regarding the affiliation that can be answered.

"Duke LifePoint officials themselves have visited our facilities recently and remain very complementary of RRHS' personnel, operations and viability as a strategic partner," Buck said.

In July, Mission Health System, Inc. backed out of a similar agreement with RRHS after Mission wanted to make changes to the original memorandum of understanding. That prompted RRHS officials to "see what other options" were available.

If the joint venture is successful, RRHS will have access to collaborate with the staff of nearly 60 peer community hospitals in 20 states throughout the LifePoint system.

"While many details of the affiliation must remain confidential until negotiations are complete and the final agreement has been approved, we continue to be extremely pleased with everything we have learned about Duke LifePoint and the expertise in quality operations that organization will bring to us," Buck said.

Buck sad there are no management changes planned and no change in name if the venture is successful.